An Option Gives Its Owner the Right to Buy or Sell

question 142

Multiple Choice

An option gives its owner the right to buy or sell an asset.This asset is generally

• A)preferred stock.
• B)mutual funds.
• C)corporate bonds.
• D)common stock.
• E)None of the above are correct.

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Definitions:

Interest Rate

The component of a loan that accrues interest to the borrower's account, conventionally shown as an annual percentage of the loan outstanding.

Consumption

The use of goods and services by households or individuals for personal satisfaction or needs.

Interest Rate

A cost, depicted as a proportion of the borrowed sum, which a lender demands from a borrower in exchange for asset usage.

Rational Behavior

A theory in economics suggesting that individuals make decisions based on maximizing utility and firms aim to maximize profits.